De Blasio’s Deputy Testifies He Had No Idea Rivington House Would Become Luxury Condos

LOWER EAST SIDE, NY — Mayor Bill de Blasio's deputy mayor claimed ignorance at a City Hall hearing Thursday morning over his approval of deed restriction waivers that allowed a nursing home on the Lower East Side to be flipped into luxury condos for a hefty profit.

Members of the City Council grilled Deputy Mayor Anthony Shorris on his failure to stop the Rivington House from being purchased by healthcare agency Allure Group, which then sold it to a luxury developer for $72 million in profit once the deed restrictions were removed by the city. Shorris claimed the developer used "deceptive practices" to manipulate city procedures for its own profit.

The Rivington House, at 45 Rivington St., was a nursing home on the Lower East Side that Allure purchased in 2015 for $28 million. Allure then paid the city $16 million to lift two deed restrictions, and it sold the building for $116 million to developers planning condos.

Shorris testified that he had no reason to believe that his go-ahead for the Department of Citywide Administrative Services (DCAS) to waive the deed restrictions on Rivington House would allow Allure to sell it to luxury condo developers. He addressed the fact that a Department of Investigation report found he had received memos from the DCAS saying the deed restrictions would be removed. He said the "brief language" in the memos did not give him any reason to believe Allure would sell the building to luxury developers.

"At no time did anyone write, call, meet or discuss with me the notion that the actions being taken by the agency would allow the property to be converted to luxury housing," Shorris said. "And I am quite sure that is the case since any such report would certainly have gotten my attention as it would have been directly contrary to what I had directed should happen."

Shorris said explicitly that he never directed someone from DCAS to lift just one deed restriction either. The first waiver allowed for the facility to operate as a for-profit facility instead of a non-profit. But waiving the second deed restriction, which dictated that Rivington House had to be a healthcare facility, ultimately paved the way for Allure to sell the building to the luxury condo developers.

The deputy mayor testified that to prevent the miscommunication from happening again, the administration has established an internal review committee. The committee includes the Office of Management and Budget and the Law Department and two City Hall units "to assess the merits of any such actions before allowing them to move forward into the now-broader public engagement process," he said.

At the end of Shorris' testimony, the deputy mayor was asked by Councilman Ben Kallos, chairman of the Committee on Governmental Operations, which held the hearing, why he limited his testimony to just 2 1/2 hours. Kallos said the council members had questions that would have lasted all day.

"Do you have anywhere else you need to be today?" Kallos asked.

"I have appointments scheduled throughout the rest of the day," Shorris answered.

Kallos said he was under the impression Shorris was to attend the U.S. Conference of Mayors Fall Leadership Meeting in Oklahoma, and that's why he had imposed a time limit.

"That is actually quite disturbing," Kallos said. Then he added, "I will be hard pressed to ever agree on a time limit from any other member of the administration ever again."

The City Council hearing on Thursday also plans to review a bill, introduced by Chin and Manhattan Borough President Gale Brewer in May, that would require the creation of a public online database to track all properties with deed restrictions. It would also require the city to notify the borough president, council member and community board where the building is located at least 60 days before the deed restriction is waived, and hold a public hearing on the deed restriction 20 to 30 days before it is waived.

Photo credit: Sarah Kaufman/Patch